No Penalty or Fine for Xerox Using High School Dropouts to Approve Medicaid Prior Authorizations for Eight Years?

The state's $235 million settlement this week with Xerox/Conduent, its former Medicaid claims administrator, unfortunately, leaves unresolved some disturbing questions about how the company could operate its insanely irresponsible orthodontic prior authorization process for so long with state officials either looking the other way or incapable of doing anything about it.

While the company has paid Texas's largest Medicaid fraud recovery, per the settlement agreement it still claims that it was following the terms of its contract and did nothing wrong. Its defense was predicated on the fact that state officials knew all about the unqualified Xerox/Conduent administrative staff who were the approval point for some 500,000 orthodontic prior authorizations from 2004 to 2012.

Using high school dropout to approve PAs

Yet three of the Xerox/Conduent dental "specialists" deposed by the state had absolutely no medical or dental training.

One was a high school dropout trained by another unqualified "specialist" to "approve" the orthodontic PAs. See the excerpted court document below, redacted to remove names.

How could it get away with this?

State's case seemed good

The state's case seemed pretty good. The Xerox/Conduent dental director admitted the PA approval process worked that way. There was no way any medical necessity was checked. Xerox/Conduent officials admitted that their quality assurance checks wouldn't go near an x-ray or radiograph. If the HLD scoresheet said 26, it was all good to go.

But let it go unchecked

Yet the state let it go on unchecked for years.

Medicaid dental providers over those eight years trusted their PA requests were being reviewed and approved for medical necessity. After all, state officials like Linda Altenhoff told them so, forwarding the illusion.

Hell, she even did that to the feds as late as 2010.

In an email that has been forwarded to TDMR, a federal OIG auditor in February 2010 asked HHSC:

"THSteps Policy 30 states that “documentation must support medical necessity of any appliance requested”. Does this mean documentation submitted with the prior authorization request or documentation kept in the orthodontist’s records? What type of documentation is acceptable?"

Answering for HHSC, Dr. Altenhoff replied: "Under current policy, the supporting documentation must be in the patient's record but can also be requested by the TMHP dental director. I will have to defer to Dr. Felkner for input regarding what he and his prior authorization team require in order to accurately assess the medical necessity for their determination of the authorization."

The federal auditor also asked: "THSteps Policy 45.6 states that ectopic eruption is “an unusual pattern of eruption, such as high labial cuspids or teeth that are grossly out of the long axis of the alveolar ridge.” What would be considered “grossly out of the long axis”?

Altenhoff wrote back: "I don't believe that "grossly out of the long axis" has ever been defined by Texas Medicaid."

Do we have to repeat it again that she apparently knew about the ludicrousness of the Xerox/Conduent PA process back in at least 2008?

Undiscovered criminal conduct or graft?

This settlement leaves us wondering if there was any criminal conduct or graft:

Who in Xerox/Conduent created this cockamamy PA process? The company was responsible for other medical PAs. Why pooch the ortho? Did someone with the company benefit financially?

Who exactly in HHSC let the process run unchecked for all those years? Did someone with the state benefit financially?

Who decided the state should go after the dentists in 2011 and not even investigate Xerox until mid-2012?

It is unbelievable that the state could not force Xerox to pay more money despite this idiotic PA setup. They only got back little more than what the 2015 federal audit came up plus some for attorney fees. Whistleblowers are now claiming their 15 to 25% of that total.

No penalties or fines for eight years of incompetence?

We suppose the answer lies in some of those 17,000 documents the state refused to give up during the discovery phase of the lawsuit.

Ortho debacle wouldn't have happened if Xerox or the HHSC did their jobs

None of this "great ortho debacle" would have happened had HHSC and Xerox/Conduent done their jobs.

The bottom line is that fraud of great magnitude was perpetrated on dental and ortho Medicaid providers, not done by them, and the people of Texas.